Setups To Look At In The Upcoming Week

Hello everyone, hope you are having a nice weekend! In this post, I want to highlight some of the trades I took last week, as well as a selection of the setups that are part of the trade advisor members watchlist for the upcoming week.

Due to a non-stop stream of news events, last week was a week that favoured the longer-term daily setups in favour of the shorter-term setups. At the same time, we’re nearing the end of the year and a lot of traders will start to position themselves with risk reduction in mind, not so much looking to open a lot of new positions.

Nevertheless, there are definitely still trading opportunities and in fact, my full trade advisor watchlist includes 15 setups so plenty to choose from in the upcoming week. But let’s first review the past week!

Reviewing The Past Week

This is a selection of the setups that have triggered from last week. It shows setups with a before and after part. The before is how I listed them in last week’s outlook and the after shows the price action at the end of this week.

It’s an example of how I approach the market and also shows that the setups I talk about in the outlook actually work 🙂

EURNZD D short

EURNZD on the daily was a setup we had been watching for a while now and this week was the week we saw the reversal. On Monday, we could already see a strong break to the downside but while this was a valid entry, it was a bit riskier since there was a trendline that could potentially make the price bounce up. However, there’s nothing wrong if you got in at this point already.

I waited for another candle and when I saw that the momentum continued, I got in. The price still moved downwards and this is a trade I’m still in at the moment.

NZDUSD D long

The final NZD related setup is NZDUSD, also on the daily. This pair was moving in a descending triangle and on Tuesday, the price broke both the triangle and the horizontal level I indicated last week. Time to get in and Wednesday saw a strong move upwards. The price since then retraced a bit, but this is still a setup I’m in.

USDJPY 1H short

Next up is USDJPY on the 1H charts! Due to the news, this wasn’t a setup for the faint of hearted but still worked out pretty nicely. We can see that it took a while, but on Wednesday this price broke our level and moved down strongly afterwards.

The upcoming week

Although not as crazy as last week, we’re heading into a pretty busy week again! Tuesday gives us the AUD RBA Meeting Minutes, on Thursday we have the JPY Interest rate decision, there’s US housing data throughout the week and multiple high-risk events for Canada, the UK and more. Here is the overview of next week:

Keep in mind that these are potential setups, not entry signals! They might materialise into a tradable setup, but only once certain conditions are fulfilled. Please read the explanation of each setup carefully.

Summary Of Setups

Here’s a selection of the full trade advisor watchlist for the upcoming week. It’s a good list of potential trading setups, so let’s have a look!

EURCHF D short

NZDJPY 4H short

NZDUSD 4H short

USDMXN 4H short

USDWTI D short

XAGUSD 4H long

EURCHF D short

We’ve discussed this pair numerous times by now! We can see a good-sized uptrend that is just slowing down. Additionally, we see RSI divergence and a strong flattening of the trend, until a point where the price cannot seem to make higher highs. I just want to point your attention towards the two last candles: both of them tested highs but then moved down strongly, resulting in bearish pin bars.

This could be the start of the pin and drive pattern and if we see a strong bearish bar on Monday, I won’t hesitate to get in. My alert is at 1.16.

NZDJPY 4H short

This is again a very nice setup on the 4H charts. Even though I was long this pair last week and on a different time frame, it’s starting to favour a short setup on the 4H charts. To summarize: we got a nice uptrend that started slow but then gained speed. It slowed down abruptly when the price reached a resistance area created by a previous swing high.

Since then, we are looking at a reversal formation that has some similarities with a head and shoulders (lower high, followed by a higher high, followed by a lower high again) and it has also determined a local support level at the 78.4 level. As always, we want to see a strong break of such a level and I will be patient and stay on the sidelines until this happens.

NZDUSD 4H short

NZDUSD on the 4H charts is the final NZD setup. After a moderate uptrend, we can see the trend slowing down. No big resistance level this time so this is something to be cautious about but at the same time, we can see that the tops are consistently sold, creating a nice resistance level in the process. We can see on the second swing that the price slightly faked out the previous high but then moved down strongly, which is where we are right now.

The setup itself is just a double top, which is an easy setup to trade: if the price can break and close below the neckline of the pattern, we can think about opening a position. That neckline is roundabout the 0.698 price level.

USDMXN 4H short

USDMXN is another example of what we are looking at in a reversal setup. It starts with a long uptrend, 2 to 3 price swings (depending on how you count), not too many spikes and clean price action. At some point, it ran into a supply level and we could see a first strong sell-off.

The 19.00 round number was strong enough to bid the price up again, but watch the price action: small bullish candles, occasionally with spikes to the downside because the bears almost got in control. Then on Friday, we could see another proportionally strong bearish candle. These are subtle signs that bears are slowly taking over and if they can break and close below 19, I’ll be a happy seller.

USDWTI D short

Crude has also been on the watchlist for a few times now and still, this setup is looking good. The price level to break hasn’t changed from last week, so 55.8 is the level to watch. We can notice a small symmetrical triangle pattern on the daily and at some point, we’ll see a breakout to either the upside or to the downside. If there’s a catalyst for a downside breakout and the price can break the 55.8 level, I’ll definitely think of shorting this chart.

XAGUSD 4H long

Silver was already interesting last week but the breakout was very strong and relatively hard to trade. At this point, we can see this is a rounding bottom reversal and after a retest, this pair seems to favour more upside. The play is simple: we look for a break of the previous high which is around 16.1. If that happens, we can get in a long position.

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I'm a full-time, independent forex trader. I've been trading for over 10 years and specialize in price action trading, reversal trading, trading psychology and algorithmic trading.
If you're determined to become a pro trader, I offer select consulting and coaching services.
When I'm not trading, I'll either be travelling the world or rock climbing (likely both). Read my story here.

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